I am Maxing out my 401k, Now What? Money Not Math Client Success Story 2

I love to help people have more confidence in their future and it is my mission to provide the highest quality advice and service possible to my clients. To accomplish this, I limit myself to having 100 active clients or less that I have a fiduciary responsibility to at all times.

One way I hope to provide value to good people is to periodically write a client success story. So that no matter what is troubling you today, you can see there is light at the end of the tunnel, and it is possible to improve your financial future.

After I gave a retirement planning presentation to a group a few years ago. A 35-year-old doctor from the group reached out to me afterwards and basically said, “I am maxing out my 401k, HSA, and IRA, now what?” So, we scheduled a meeting to discuss their current planning and determine if it might make sense for us to work together. In that meeting I found out a few key pieces of information about this person that would impact their planning. They were motivated to be a good steward of their money so they could help others, they wanted to travel, and they wanted to retire as early as possible so they could go on mission trips and volunteer to help those in need across the world.

This was great news and a problem at the same time. It was great news because this was obviously an incredible human that cares about others that I would enjoy working with. But the problem was, like many people, their life aspirations and current savings strategies did not align and were not working together. They were maxing out their 401k, IRA, and HSA. Which is an impressive display of discipline and saving for their future. However, the problem is their primary goals in life were to help others, travel, and retire as soon as possible which means they would need access to their money and liquidity before they are 59.5 years old. Unfortunately, their max contributions to their 401k and IRA would not be completely liquid without penalty or taxes until they were 59.5. Plus, they had no current medical issues or expenses so even though their HSA savings would be valuable in the future, they were not overly impactful when it came to achieving their shorter-term goals. Therefore, a majority of their current savings were not going to help them achieve their goals and they did not have any strategies in place to help them achieve their goals.

They decided they wanted to work together so we got to work reviewing savings strategies and options for them to consider that would help them achieve their goals by growing their wealth while staying liquid or accessible when they wanted. Since that time, they continued saving into their 401k, IRA, and HSA while also adding two additional tools to their strategy that will grow, balance their exposure to the market, and stay accessible for them to use to help others, travel, and retire as soon as possible rather than waiting until they are 59.5 years old. Plus, they also completed their estate planning, and we continue to meet once or twice a year to maintain and update their planning.

Thank you and I hope you have a wonderful day,

Drew Erickson

Disclaimer, this content is not legal, tax, or investment advice. You should always consult a qualified professional regarding your personal situation. Please reach out if you have questions or would like to discuss any of the details mentioned in this client’s story. Out of respect to the clients, I kept names and specific details out of this story while leaving enough information to hopefully provide value. This story would not have been written without the consent of my clients about whom it is written. And as always, everything my clients do with me is confidential at all times and is not shared with any of my other clients or people I know without their consent.